Last week China’ manufacturing PMI rose to a 4-month high, breaching the 50 point expansionary level. Increasing signs the industrial cycle in China has bottomed out, together with improving US data, bodes well for the more industrial precious metals such as silver, platinum and palladium. But for a full-blown cyclical rally, the fiscal cliff and Spain bailout issues likely need to be resolved.
Key events to watch this week
While there is no consistent relationship between political affiliation of the US President and the performance of precious metals, the size of the electoral win will help determine the president’s ability to push for a budget compromise.
The new leadership of China that emerges from the 18th Chinese Party Congress will be closely examined for its support of current expansionary macro policies and its external political/military stance.
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